Nextera Energy Inc ($NEE) Q4 2025 Earnings Call

Thanks, Mark, and good morning, everyone. NextEra Energy had strong operational and financial performance in 2025, delivering full year adjusted earnings per share of $3.71, up over 8% from 2024, and slightly better than what we communicated at the top end of our range at our investor conference in December. Our expectations are to grow adjusted earnings per share at a compound annual growth rate of 8% plus through 2032, and we are targeting the same from 2032 through 2035, all off the 2025 base. As we enter a new year, we're focused on the opportunity in front of us. America needs more electrons on the grid, and America needs a proven energy infrastructure builder to get the job done. That's who we are, and that's what we do. NextEra Energy develops, builds, and operates energy infrastructure across the energy value chain, whether it's power generation, storage, or linear electric and gas infrastructure. It's why I believe we are well-positioned for the future as we execute against our strategic plan with the over 12 ways to grow that we presented in December. Importantly, our forecast of growth is visible and balanced between our regulated and long-term contracted businesses. Last year was about laying the groundwork for the future of our business. This year is about execution, which is our strong suit. Let's start with FPL, which begins the year with a new four-year rate agreement that runs through the remainder of the decade. The Florida Public Service Commission unanimously approved the agreement in November and issued its final order last week. The agreement allows us to make smart, long-term infrastructure investments on behalf of our customers while keeping bills well below the national average. FPL expects to invest between 90 and 100 billion dollars through 2032, primarily to support Florida's growth while continuing its track record of keeping customer bills low and reliability high. While customer affordability is a major concern throughout many parts of the US, FPL's typical retail bill today is more than 30% lower than the national average. And FPL expects typical residential customer bills to increase only about 2% annually between 2025 and 2029, which is lower than the current inflation rate of about 3%. Keeping customer bills low is our number one priority, and we do that by continuously investing in and executing against a best-in-class operating model. That discipline delivers real results. FPL's non-fuel O&M is more than 71% lower than the industry average, reinforcing our position as the lowest-cost electric utility operator in the country. The four-year rate agreement also provides an allowed midpoint regulatory return on equity of 10.95% with a range of 9.95% to 11.95%. FPL's equity ratio remains at 59.6%, and the agreement includes a rate stabilization mechanism. FPL's agreement also includes a large load tariff. We believe the tariff strikes the right balance by providing hyperscalers with speed to market at a competitive price, while just as importantly, protecting our existing customers from bearing infrastructure build-out costs needed to support hyperscalers. FPL's speed to market advantages, combined with its best-in-class service, is creating significant large load interest to the tune of over 20 gigawatts to date. Of that, we are in advanced discussions on about nine gigawatts, a portion of which we now believe we could begin serving as soon as 2028. For context, every gigawatt is equivalent to roughly two billion dollars of CapEx, and earns the same return on equity as other FPL investments. Florida's growth requires continued investment in energy infrastructure. The state is expected to surpass 26 million residents by 2040, but it's more than just people moving into the state. Today, Florida is a 1.8 trillion dollar economy, the 15th largest economy in the world if the state were a stand-alone country. Florida leads the nation in key economic indicators like income migration, manufacturing job growth, and corporate headquarter relocations. And that's what makes Florida's growth different than in the past. A diverse set of high-growth industries is bringing new businesses to the state from the Space Coast to Miami and all across Florida. It's why Florida expects to add 1.5 million new jobs by 2034. This is high-quality economic development with high-wage jobs and innovative industries. FPL's continued infrastructure investments help make this economic transformation possible. Energy Resources also continues to grow its regulated portfolio, electric and gas transmission. NextEra Energy Transmission is one of America's leading independent electric transmission companies with total regulated and secured capital of eight billion dollars. In fact, it's almost twice the rate base size of Gulf Power when we bought the company in 2019. Our scale and experience position us well as we execute on new transmission opportunities across America. NextEra Energy Transmission has secured roughly five billion dollars in new projects since 2023. This includes PJM's recommendation in December that NextEra Energy Transmission and Exelon be selected to develop a new 1.7 billion dollar high-voltage transmission line, which is expected to enhance the flow of more than seven gigawatts of power across the region. We expect PJM to make decision on this project next month. We also continue to execute against our plan to grow our gas transmission business. Energy Resources has ownership interests in more than 1,000 miles of FERC-regulated pipelines, a portfolio with organic expansion opportunities. For example, Mountain Valley Pipeline has multiple ways to grow and is ideally positioned to bring gas from the Marcellus Shale even further into the Southeast, where gas demand is already high. It's why we acquired a portion of ConEd's interest in MVP earlier this month, and we'll continue to look for opportunities to optimize and expand our regulated gas pipeline portfolio as we provide energy infrastructure solutions to enable large loads across the country. Putting it all together, we expect our combined electric and gas transmission business at Energy resources to grow to 20 billion dollars of total regulated and invested capital by 2032, a 20% compounded annual growth rate off a 2025 base. Energy Resources had another record year originating new long-term contract of generation and storage projects. We added approximately 13 and 1/2 gigawatts to our backlog, which includes a record quarter of origination of 3.6 gigawatts since our last call. We have now originated approximately 35 gigawatts over last 3 years. To put that into context, 35 gigawatts of power generation would rank as the fourth largest public utility in the US. What's also important is adding electrons to the grid. Again, that's what America needs right now. And that's what Energy Resources did, putting 7.2 gigawatts of projects into commercial operation since last year, an Energy Resources record for a single year. Together, FPL and Energy Resources placed into service approximately 8.7 gigawatts of new generation and storage projects in 2025. We continue to be well-positioned to build more renewables, which remain the lowest-cost and fastest solution to meet our customers' immediate needs. We've secured solar panels to meet our development expectations for 2029. We've begun construction on those projects, too. We've also secured 1.5 times our project inventory against our forecast, providing us permitting protection. Few companies in our industry are positioned like us. We've taken the same approach for battery storage, securing a domestic battery supply through 2029. That's important because battery storage now represents almost 1/3 of our 30 gigawatt backlog with nearly 5 gigawatts originated over the past 12 months. We don't see this demand slowing. Nearly every region in the country needs capacity, and battery storage is the only new capacity resource available at scale. With a national footprint and large land position, we can work with customers across the country on standalone storage. But that's just the beginning. We can also take advantage of our existing footprint by co-locating storage where we already have connections to the grid, effectively doubling down or doubling capacity at a site. While it's the early innings, we're looking at long-duration opportunities in two. In all, if you just look at standalone and co-located battery storage assets, we have a 95 gigawatt pipeline. If you assume we can ultimately expand each of these sites, we could potentially double our total backlog. It's a huge competitive advantage and positions us well in a market that's showing strong demand. We also continue to advance our potential gas-fired generation builds with a pipeline that's now topped 20 gigawatts. To get us started, we've secured gas turbine slots with GE Vernova to support 4 gigawatts of gas-fired generation projects. We have a lot of experience building gas-fired generation as no one has built more over the last 20 years than NextEra Energy. Energy Resources remains focused on both optimizing and adding generating capacity to its nuclear fleet. We continue to advance the recommissioning of our Duane Arnold nuclear plant in Iowa, made possible by the 25-year power purchase agreement with Google we announced last year. Our nuclear fleet outside Florida is also ripe for advanced nuclear development. That's why we are spending time closely evaluating the capabilities of various SMR OEMs. All told, we have 6 gigawatts of SMR co-location opportunities at our nuclear sites and are working to develop new greenfield sites. Of course, any new any nuclear new build would have to include the right commercial terms conditions with appropriate risk-sharing mechanisms that limit our ultimate exposure. In addition to Duane Arnold, we have capacity available at our nuclear plants in New Hampshire and Wisconsin. Last year, Point Beach received a subsequent license renewal to operate for another 20 years in Wisconsin and then signed a PPA extension for 14% of the plant's capacity. That deal alone contributes 3 cents of annual adjusted earnings per share. Extrapolate that to the rest of the plant and you would get 21 cents of annual earnings per share, which is a meaningful increase to the annual earnings per share contribution from the current contract. We are also seeing similar interest at our Seabrook nuclear plant in New Hampshire. Between the two of them, we have 1.7 gigawatts of capacity we're offering to the market. Our ability to build all these forms of energy infrastructure is why Energy Resources continues to be a partner of choice for hyperscalers. Remember, companies investing tens of billions of dollars in technology infrastructure don't have time and can't afford to take a chance on a failed project. We come to the table with a national footprint, decades of development experience, unmatched energy infrastructure capabilities, and a strong balance sheet to support their needs. Our breadth and depth allow us to have a multi-year, multi-gigawatt, multi-technology discussion with hyperscalers. These data center hub opportunities, as we call them, represent a powerful channel to originate large generation projects with expansion opportunities where we can grow alongside our hyperscaler partner rather than building on a project-by-project basis. As we discussed in December, our data center hub strategy is all part of our new 15 by 35 origination channel and goal for Energy Resources to place in service 15 gigawatts of new generation for data center hubs by 2035. This dedicated work stream to power data center hubs is expected to help us achieve our existing development expectations through a mix of new renewables, battery storage, and gas generation. And it gives us one potential path to achieve the 6 gigawatts, the midpoint of our development expectations, of new gas-fired generation built through 2032. We currently have 20 potential hubs we are discussing with the market, and we expect that number to rise to 40 by year-end. While we won't convert every single hub, I'll be disappointed if we don't double our goal and deliver at least 30 gigawatts through this channel by 2035. To get there, Energy Resources is laser-focused on positioning the company to where we see the large load market going, and that's to bring your own generation or BYOG. And it makes sense given affordability concerns across the US. Hyperscalers can solve that problem by bringing and paying for their own power generation infrastructure. In fact, this issue took center stage earlier this month when the White House and a bipartisan group of mid-Atlantic governors came forward with a framework of a potential solution to address the mounting affordability challenges in the PJM market. We believe we are uniquely positioned to deliver for the BYOG market across America. That's because at our core, Energy Resources is a builder. We also have a strong balance sheet, and we have decades of experience in the team required to get the job done. Here's what also separates us. We can work with hyperscalers and the local service provider, whether it's an investor-owned utility, a municipal utility, a cooperative, or a retail electric provider in a competitive market. We have deep, long-standing relationships across the board. That matters. On top of that, our renewables and storage portfolio provides us with the speed-to-market solution to get the initial phase of a data center off the ground and built. Think of it as a hook, so to speak, that's important for two reasons. First, it means the hyperscaler doesn't have to wait. Second, it allows us to then grow with our data center customers over time by providing additional capacity through other power generation solutions like new gas-fired generation or SMRs. Importantly, we've done the work to make sure we are ready to build what our customers need when and where they need it. And we're not just building new infrastructure. We're also working to maximize the value of our existing assets. I talked about our recontracting opportunity at our nuclear sites. It's the same story across our renewables fleet, where we have up to 6 gigawatts of recontracting opportunities for 2032. The PPAs for these projects were signed more than a decade ago during much different market conditions. As the PPAs begin to expire over the next several years, we believe recontracting will command a higher price. Energy Resources customer supply business also creates a key competitive advantage providing significant market insight. And that portfolio and knowledge base is growing. On January 9th, we successfully closed on our acquisition of Symmetry Energy Solutions, which is one of the leading suppliers of natural gas in the US and an ideal addition to our footprint. Symmetry operates in 34 states and provides us access to additional physical assets enabling us to deliver a broad range of solutions for our customers. We expect more gas-fired generation to be built across America including by NextEra Energy. So, having the ability to move molecules around the country is a critical skill set. We are also spending a considerable amount of time accelerating our use of artificial intelligence. In fact, I expect our team to leverage AI better than anyone in America. As we announced at our investor conference last month, NextEra Energy and Google Cloud have entered into a landmark strategic technology partnership to redefine the future of the electric industry. Google Cloud is helping us drive and accelerate our own enterprise-wide AI transformation called Rewire. And Rewire will also help us identify and ultimately build AI first products leveraging Google Cloud's platform. The plan is for our first products to help enable dynamic AI enhanced field operations and a more reliable and resilient grid. In fact, we expect to launch our first product at an industry event in early February as our partnership with Google is off and running. As I said at our investor conference last month, past performance doesn't guarantee future results, but I believe it's a strong indicator when the road ahead looks a lot like the road NextEra Energy has already traveled. Across economic cycles, NextEra Energy's financial performance has remained consistent. The difference today is that we have more ways to grow and an opportunity like never before to build new energy infrastructure to meet growing power demand across our country. As we move forward, we will remain focused on what has long defined us. Being America's leading utility company and leading energy infrastructure developer and builder of all forms of energy. I couldn't be more excited about our future. With that, I'll turn it over to Mike.

Yeah, Steve. It's John. Thank you for the question and you know, first of all, the short answer is it has no impact on our partnership. You know, Google called us, you know, in advance of the announcement and said as much, you know, to us and here's

We have a lot of respect for Intersect, but they're a smaller developer concentrated in two states, California and ERCOT. When you buy into a smaller developer, you're buying into their existing position and you really have to think through what that comes with. Where are they on safe harbor? Those deadlines have already passed for tax credits, so you're stuck with whatever safe harbor position they have. A smaller developer is always going to have a small safe harbor position given the obvious limitations. FIOC is another safe harbor where the deadline has passed as well. We are in an outstanding position in both of those areas and have a ton of flexibility to add a lot of generation.

You're also kind of stuck with their inventory. Where are their permitted sites? We have permitted sites across the United States with one and a half times coverage on those sites. You're also kind of stuck with their supply chain position and their relationships. Remember, there's long lead time equipment that has to be secured. So, if you weren't planning on an acquisition, you probably didn't have a lot of inventory to start with to go engage in a large build, and so I think that's certainly a limiting factor. We've been very vocal. We've been out buying equipment across the energy value chain, secured our solar and storage inventory through 2029. I don't think many small developers can say that.

And then experience across technologies. You've got to really find somebody that knows all 50 states, that can do business in 50 states, understands the ISOs in and out, working with FERC, working with Washington, and experience across wind and solar and storage and transmission, whether it's electric or gas, all of those things are nuclear and gas-fired generation. It's very rare and unusual and unique the position that NextEra is in. And so, I think when you put all those factors together, addressing your other question, the competitive risk, I just don't see it. We are in a period of significant power demand, needing to put electrons on the grid. We have great sites. We have 20 data center hubs that we're developing currently, trying to expand that to 40. Small developers just don't have that. And so, we're in a great spot and I couldn't be less concerned.

Sure. I'll turn that over to Scott Bories to address the Florida question and I'll come back and talk about what we're seeing on the national level.

Yeah, and when I look at things nationally, that's what's so beneficial about what NextEra Energy brings to the table. One, we have a national footprint. Two, we have the ability to really help our customers design affordable and reliable solutions given what we can bring to the table across the energy value chain. We really can help them actually come up with a solution that really threads the needle around affordability, but also bringing the necessary electrons that are required to create that job creation, create that property tax base.

And like I said in my prepared remarks, we really see this heading more towards bring your own generation. And I think that's how we've set up our entire pipeline and our development effort. We are one of the very few companies that are out there building, and if investors are looking for a way to get exposure to a builder, I think we're the perfect answer for that. And I think that's where Washington is heading. I think that's where the various ISOs are heading because it's going to be really important that the hyperscaler shoulder the cost associated with the incremental generation that has to be built to power the data center. And I think we're the perfect partner to do that given the relationships that we have, given our ability to do things at a much lower cost than our competition. And so, feel good about where things stand outside of Florida as well for those reasons.

Yeah, let me go ahead and take those in order, Julian. So first of all, let's just talk about the development expectations that we laid out at the investor conference. As I've said before, they're not heroic. They're basically as long as we can do through 2032 what we've done over the last 10 or 20 years, we're going to be in great shape. We're counting on market share that is very consistent with what we've been able to achieve over the last one to two decades. In renewables, it's about 15 to 20%, in storage, it's about 20 to 30%, and in gas through 2032, it's only 5 to 10% market share. So we feel very good first of all with the base forecast.

Second, when you mentioned the 15 by 35, one of the things that I want to make really clear is that 15 by 35 is just an origination channel. That's a program that we have on the origination side to hit those very reasonable, very realistic development expectations. It's one of many ways to get there. And when you unpack that 15 to 35 gigawatts, the composition of it is roughly 6 gigawatts of gas-fired generation by 2035. And it's going COD by 2035 to hit that. And it's a mix of renewables and storage for the balance. So, we feel good about where we stand. We hope to be able to do a little bit better than that. Actually, let me make one clarification. That's 6 gigawatts gas by 2032. I said 2035, by 2032.

And second, let me talk about the milestones for Florida real quick and then we'll turn things over to Armando to add some points on Florida. For FPL, we feel really good about where things stand. Right now, we have 20 gigawatts of interest in Florida. And we have advanced discussions with customers on roughly 9 gigawatts. For all the reasons that I had in my prepared remarks, Florida is a terrific data center opportunity for the right partner. I think folks see that and they realize the benefits and the growth that we're going to be seeing in Florida, the fiber latency issues, the need to be close to where business is developing in South Florida, all the development that we're seeing across the state. But second, what's really attractive and what's really appealing, I think, for hyperscalers is look, we have a low bill, we know how to get things done, we have a long track record of being able to work with the state at all levels. And but most importantly, from a customer standpoint, we have a large load tariff that makes sure that the hyperscaler is paying the cost of the additional bill, not the customers in Florida. Armando, do you have anything you'd like to add?

And Julian, just on the question around what does 2026 look like for us for success, I just go back to 13, comment about 13 is our expectations. This is our kind of road map that we're going to track against from the standpoint of where do we think we will be developing. And so, this channel feeds into this as John mentioned. So, we're looking at the expectations that we're laying out here on page 13 and continue to track against those.

Yeah, I'll say two things about that, Julian. First of all, we have a lot going on as a company, a lot of opportunities, a lot of discussions that we're having with customers that are in various stages. You should not expect us to wait for quarterly calls to announce those things. So, as they happen, we will come forward with them on those chunkier deals, as you call them.

Julian. Take care.

Good morning, Shar.

Yeah, first of all, on Wisconsin and Point Beach, I'd say this about all of our nuclear plants. We saw how much interest there was around Duane Arnold. There's a lot of interest around Point Beach. Wisconsin's in a great spot for data center build out. It's no secret how much interest there's been there, Foxconn and Cloverleaf and some of the other expansion opportunities around the state. Very conducive to data center build out. And so, with that, becomes a lot of interest around power generation solutions. And given the relationships that we have with utilities in the Midwest region and with cooperatives in the area, you saw the Whippy deal that we announced with 14% of the generation already having been secured is one example of that. We feel very good about how that asset is positioned. We're going to be careful and methodical about our approach and make sure that we are doing the right thing by our shareholders in terms of what we ultimately do with that asset.

Yeah, I think Shar, the way I would answer that is still a lot to play out. And you got to have regulatory certainty before you allocate capital against any investment. And so, we would have to have real regulatory certainty around outcomes here in order to drive new investment. And I think that is exactly what the administration is trying to do and I think that's what the 13 governors that signed on to the recent framework agreement or framework proposal that was announced. But PJM has more work to do in terms of coming up with what exactly they plan for the future of that market. But certainly, under the right construct, it could be attractive for new generation. But you have to have a long-term certainty around what capacity prices are going to be. They have to be at the right level in order to support new investment in that area. And as I look at it with how we're positioned around BYOG, we have so many opportunities around the United States right now that we are pursuing. But certainly, we have a close, keen eye on PJM as well and are watching to see how things play out.

Thank you, Shar.

Thanks. So, look, customers want to make sure that when they're plopping down the $10 billion or so for all the capital that's needed for one of these, that they're in a place that they feel comfortable long-term. And while we have a tariff, there is current legislation being discussed up in Tallahassee that may make a difference in terms of water usage, may make a difference in terms of items that the hyperscalers or large load company entities can get from local municipalities or from the state. And they're waiting to see how that shakes itself out. Scott answered a question before on what's going on in Tallahassee. We feel quite comfortable that we are going to get to a very constructive outcome in terms of what data centers have to look at in order to do business in Florida. But my expectation is, as I answered a question before, is that in 2026, based on what we are seeing, the interest that we are seeing on the ground here in Florida and particularly in the FPL service territory, that there will be some announcements in 2026. So again, I expect there to be a constructive outcome to the legislation that's being discussed up in Tallahassee and I also think it's very likely that we will have announcements in 2026 regarding large load in our service territory.

Yeah, Nicholas. So first of all, we have a 4 gig position on gas which we would put against the opportunity set, mainly those data center hub opportunities that we see and are continuing to advance that talked a lot about on this call. From when will we secure more, as our discussions continue to advance and we continue to have very good discussions kind of across the board on those 20 gigawatts of data center hubs that we hope to grow to 40 by the end of this year. And we always make prudent decisions around how we manage our supply chain position. I don't worry too much about it in terms of gas turbine availability though. I mean given the relationship and partnership that we have with GE Vernova, getting our hands on gas turbines at an economic and competitive price is not the top of my list of things to be concerned about. And so I think that probably also addresses the pricing point. I can't give you specific pricing terms and conditions that we would get or that we would see, but they're I would say they just remain consistent with what we told you back in December.

Morning.

Sure. We had some wind additions that you saw in 28 and in 29 if you were looking at the backlog page and we continue to see balance across our business from the standpoint of opportunities for people looking for electrons. And so I don't, from a green shoots perspective, I do think we'll continue to see more solar, more storage and then ultimately gas relative to wind. I think that's a trend that continues to move forward, but we still see interest across the various products. We've got a national footprint and national customer base and the need for electrons kind of varies. So we're glad to add them, but I think the trend is still going to be more towards solar and batteries as we think about those various products.

Yeah, good question. And we've done a lot of work around the OEMs. I think we said back in December, we kind of took the 96 or so folks that call them SMR OEMs and called that down to about 12 and then did deep dives on technology commercial assessment around the balance. And we have a very good feel as to who may make sense to advance discussions with there, but whether or not we partner with one, partnering is not something that we've historically done. We like to create competition amongst our suppliers unless one particular supplier has concentration in a specific area or has a unique technology offering and we can enter into an attractive long-term pricing arrangement that creates win-wins. But we're always careful about locking ourselves in with just one counterparty. But obviously for us to advance on SMRs, which is something we are, have an SMR team first of all, I should say. We are taking this very seriously. We have a part of our development organization that is focused 100% on SMRs. So we're not only looking at development around our existing nuclear sites, but we're also looking at greenfield opportunities as well and how an SMR could fit into a long-term solution around a data center hub as we look to the future. But again, any movement from us on SMRs, I go back to what I said in the prepared remarks, has to be under the right commercial terms and conditions where there's appropriate risk sharing, capping on financial exposure because we're going to be very prudent and careful how we approach that market. But excited about the potential. You also asked about some of these announcements where you see hyperscalers teaming up with one specific OEM. Not sure how much I would read into that. I think really folks are just trying to learn more and see who has viable solutions out there. We'll see which ones actually advance over time. But that's what we are keenly focused on and in any discussion that's not around SMRs, it's not only with the OEM, it's with the hyperscalers as well. It's with the government. It's going to take four parties coming together to come up with the right structure that makes sense. But it's something we're very focused on.

Yeah, I think first of all, I think the administration is doing all the right things. Like you said, they are really trying to enable American energy dominance across the board and excited about many of the programs that they're coming forward with around nuclear in particular around SMRs and advanced nuclear. I think that just those programs that they've already established create the opportunity for that four-way discussion that I just mentioned in a very constructive way that hopefully get one of these projects off and running under the appropriate commercial structure. But more work to do there. I think we've made some very good progress in that area and I think the government is doing the right things. And so it's up to developers and OEMs and customers to come together to work with the government on the right framework.

Sure. Listen, I think our confidence continues to be high. PJM management continues to recommend and we expect them to continue to recommend for the board in the ultimate board meeting. We're listening to everyone, all the stakeholders, the OCA as they continue to think about this project, but we think this is important for reliability, it's the lowest cost to answer in the region to achieve that reliability and it continues to be supported by PJM. So we feel good and continue to feel good and we'll continue to listen to all the stakeholders throughout the process.

Yeah, I think as we've mentioned on the natural gas pipelines it's going to be an area that we continue to grow over the course of the next decade. If you look at what occurred between 2025 and what we look at for 2026 is simply as you look at our proportional ownership share in Explorer they had a pipeline of Meade that they divested at Explorer and that brought down that EBITDA but as you look on a go forward basis pipelines will be a critical piece of our growth trajectory for 2026 and beyond. And then as you look at gas infrastructure I think the reduction in EBITDA is relatively small, 50ish million dollars or so so as you look at that piece we'll continue to see that have a place in our overall structure but I wouldn't necessarily expect that to be a key piece of our growth trajectory.